NEW DELHI: Xiaomi has made its first investment in India, leading a $25-million Rs170 crore) funding round into Hungama Digital Media Entertainment, an aggregator and publisher of entertainment content on the internet.

Xiaomi, which will invest along with Hungama's existing investors Intel Capital, Bessemer Venture Partners and Rakesh Jhunjhunwala, will pick up a minority, but undisclosed, stake in the Mumbai-based company.

“Xiaomi is leading an investment round of $25 million in Hungama, with existing investors,” said Xiaomi’s head of international operations Hugo Barra. “At the same time we’re partnering for video on demand service in India and integrating it into our platform”.

The investment marks Xiaomi's first investment into a start-up outside its home market of China, and underlines the importance of the fast growing Indian smartphone market, which is well on its way to become a leading base of internet consumers, from the present base of around 400 million users.

Xiaomi will integrate Hungama’s video on demand service with the Mi platform available on smartphones and televisions, the latter not yet available in India. The companies did not divulge the timeline of integration, but said that post the integration, the platform will have some free and some paid content that will be part of the monetisation strategy.

China's largest smartphone maker is replicating its home model in India, where it has launched two of its leading smartphones in 2016, including the latest flagship Mi 5 last week. Though it trails top five players in the handset sales business, it is among the first amongst the deluge of Chinese players to have invested in a company in India.

In China, Xiaomi has invested in 55 companies which form part of the Mi Ecosystem. Of these, 29 have been incubated but only 20 lave launched products. About 7 companies of this subset have clocked sales of RMB 100 million and two – which make power banks and fitness bands - have surpassed the RMB 1 billion sales mark.

Xiaomi aims to have a similar ecosystem here and feels that video on demand is one of the fastest growing services which will become a key driver for users to get on to the internet.

"With 4G taking off, starting this year, video on demand is unlocked because the experience gets huge upgrade when you switch from 3G to 4G," Barra said, underlining the value add 4G networks of telcos like Bharti Airtel, Vodafone, Idea Cellular and upcoming services of Reliance Jio will bring to the market.

Barra estimates 4G customers in the South Asian nation to skyrocket to 180 million by 2018, from about 6 million at present.

Neeraj Roy, Founder and CEO, Hungama said that the investment will further strengthen the company’s movie and television services, besides adding to its 65 million monthly active consumers across platforms that access music, video and movie services in several vernacular languages.

“Hungama Play (app) will shortly add 1500 hours of TV content in Indian languages and English,” he added.

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